Tuesday, November 25, 2008

Listening to WCCO this morning, I learned that Hormel is doing better than expected in part due to strong sales of SPAM. Now while I understand that SPAM has been traditionally a staple for a low cost diet, I don't know that (at over $2/can, over $3/lb) it's really that inexpensive a meat. Yes, it keeps well, but given what it does to one's health, I think it clearly falls into the "penny wise, pound foolish" category.

Also, if you're bummed about never joining a fraternity, consider the Sigma Pi Alpha Mu "mosey" this year. All you have to do to join is come up with a ludicrous sounding title for yourself, and you can be the official (ludicrous sounding title) of the "SPAMmies."

No need to buy your friends or drink yourself to death to go "Greek." You don't even need to eat this junk. No embarrassing initiation ceremonies, raucous parties until the wee hours, or even criminal investigations. Just the sheer pride of belonging to the nation's premier four letter fraternity.

Thursday, November 20, 2008

Sorry, Patti. I just couldn't resist. But in fairness, let's take a look at the numbers and see if they work out for a bailout package. According to sources found by Jim, Toyota has an appoximately $3800 per car profit advantage over GM. Let's see how it breaks down:

Labor; at $73/hour for 34.3 hours of labor for a vehicle, GM is paying about $1150-1200 more than does Toyota, which pays $48/hour for 28 hours of labor for its vehicles here. A bailout doesn't help this in the least, but Chapter 11 would help immensely.

Debt: GM has $44 billion in debt, meaning $3-5 billion annually to cover the interest alone. A bailout loan could reduce the interest, netting about $500/car. Chapter 11 would likely do the same.

What we find; unless a loan would fundamentally restructure GM (or Ford or Chrysler), it just buys time. Even bankruptcy only gets about $2000 back per vehicle. What is needed for the Detroit 3 to be profitable?

I'd suggest a repeal of CAFE standards would be a great start, along with other misguided regulations that make GM more of a regulatory compliance company than a car company. New blood in management wouldn't hurt, either.

Wednesday, November 19, 2008

This morning, on the cover of one of my engineering journals, there was a picture of young man and woman in a convertible, driving through a beautiful forest on a bright summer day. One can imagine finding the picnic spot, spreading the tablecloth.....

....until you look closely at the picture, and it turns out that the guy in the passenger seat is not paying attention to his beautiful companion, but is rather "googling" something.

Visited my mom last weekend, and she's in good spirits, but obviously feeling the very major surgery she had. Her recovery appears to be a bit more rapid than expected.

Also, I learned about something we might get to live with as our latest Illini President takes office; the state of Illinois is about $4 billion behind on its obligations. Multiply by 50....but of course, if they simply stopped putting up "Rod Blagojevich, Governor" signs on every construction project (including most pothole repairs it seems), they could make ends meet within a week or two.

Advocates of bailouts might point to the Chrysler bailout of 1979 as a way of justifying an even more massive bailout of GM, Ford, and Chrysler today. It could work if....

....manufacturers use it to rework their cost structure, as Chrysler did--famously firing thousands of middle managers and reworking their product lineup. Now let's compare with today; unions and executives are more or less working to prevent the kind of re-working that Iacocca did today.

So my verdict; this "bailout" is like the loan you foolishly gave to your brother "Vinnie" (or other relative of your choice). "Vinnie" spends more than he earns, and by giving him $1000, you postponed the day he'd learn that a McDonald's janitor doesn't need a new car and three trips to the bar each week, right?

Same basic principle with the Detroit 3. You might as well throw $25 billion down the toilet.

Friday, November 14, 2008

Evidently, the case of parents dropping off teens in Nebraska due to an ill-conceived "safe haven" law has (thankfully) convinced legislators that the law need to be amended to allow only the dropping off of infants. Even that, though, probably misses the point.

How so? Look closely at the mother's testimony in the article. More or less, she adopted a girl from harsh roots, and when the girl acted as if those harsh roots had damaged her, social services pretty much refused to help her. My brother in law and his wife had much the same experience with twins they adopted; social services would do anything but come alongside those who desperately needed help.

Now I don't know whether I really want Social Services to try and help any more than they do. It would be far better if churches stepped forward and did what was needed. That noted, this illustrates what our libertarian friends have been trying to tell us for decades; government is a little bit better at "compulsion" and "command" than at "helping."

Brian, quiet guest and occasional poster, pointed to the full NY Times article by Paul Krugman, in which he notes that the hypothetical "Paradox of thrift" is likely to be mitigated by the Federal Reserve working to increase the money supply. Let's take our hypothetical "cash in the mattress" person, and let's see with Bernanke and Krugman would do in order to coax that cash back into what they view as the economic system.

Or, for that matter, let's see what is being done now--pumping two trillion dollars plus the trillion dollar bailout into the economy--and consider its likely effects. Keep in mind here that printing money does not in itself generate economic activity--money is only the means of transaction.

Without arrogating to myself the job of guessing the exact extent, I would have to guess that prices would be higher than they otherwise would be. Anyone smart enough to save for the future loses from Marriner S. Eccles' attempts (oops, Ben Bernanke's) to avoid deflation. Can we say "moral hazard"?

On the bright side, the sheer scope of the disaster that may be now unfolding will either confirm or reject Milton Friedman's position that Eccles and Black's mistake was to "not do enough" to increase the money supply. Unfortunately, I think that at this time, this is one position of Friedman's that is going to suffer shipwreck on the rocks of historical data, just as anyone familiar with Japan's economic slowdown over the past two decades might also suggest.

Thursday, November 13, 2008

Left lobe of the liver largely removed, lymph node also removed, eight units of blood given to her (the liver is heavily vascularized, it cleans the blood), and she's recovering OK so far. Pray that the remaining liver keeps/regains its function, and that they did indeed get everything.

And pray that we would be as persistent in doing good as this cancer is in doing bad. This is my mom's third surgery, and if the liver recovers, she'll be in for a third round of chemo. Cancer is some nasty stuff.

Wednesday, November 12, 2008

My mom's getting prepped for surgery about right now. Two "fast-growing" sites on her liver, pretty sure at least one is cancerous. Pray that they doctors would get as much of both sites out as possible.

Apparently, President-elect Obama is NOT considering the D.C Public (government) schools as an option for his daughters. Now while I can't blame the Secret Service for telling the incoming President that they really would prefer NOT to try to provide security in such a situation, I do think that any politician who opposes school choice ought to be REQUIRED to send his children (or grandchildren for older pols) to the local government schools. If it's good enough for the poor, it's good enough for politicians.

At the very least, voters ought to remember which politicians work against school choice while sending their children to private and parochial schools, and vote accordingly.

Tuesday, November 11, 2008

[O]ne of the high points of the semester, if you're a teacher of introductory macroeconomics, comes when you explain how individual virtue can be public vice, how attempts by consumers to do the right thing by saving more can leave everyone worse off. The point is that if consumers cut their spending, and nothing else takes the place of that spending, the economy will slide into a recession, reducing everyone's income.

In fact, consumers' income may actually fall more than their spending, so that their attempt to save more backfires — a possibility known as the paradox of thrift.

Now think about this one a minute. When you refuse to spend a dollar, something automatically takes the place of that spending. Specifically, you have saved that dollar, and it is available for debt repayment, capital formation, charity, or (yikes) taxation. Hence, Krugman's (and Keynes') premise is absurd; there is no dollar that fails to function in our economy. Even the wad of bills stuffed in a mattress sends economic signals (specifically; the owner expects deflation to make banks fail and prices to fall).

And so Keynes' ship "Paradox of Thrift" finds itself where it ought to be; crashing against the hard rocks of Bastiat's "That Which is Unseen." When we divert resources from their desired use to a less desired use, we reduce utility and deepen economic difficulties. It's scary that they give out prizes for thinking like Keynes'.

What is hilarious to me; this guy did not figure out that anything was wrong when the "lady" didn't run away. He's a law officer, he's in uniform, and he's driving a marked car. In most any other city, I would guess that anyone driving a government-marked car can more or less watch prostitutes melt away as they drive down the street, given that it is after all an illegal activity. It's quite telling that DC prostitutes appear to have different expectations for at least the Secret Service.

Moreover, if this kind of behavior is widespread--as this particular "lady's" behavior seems to indicate--I would have to suggest that one of the big reasons for DC's high crime rate is that, ahem, authorities are literally in bed with criminals. The Secret Service might do well to throw the book at this guy for exactly this reason.

Monday, November 10, 2008

Jim tells me that Circuit City has just filed for bankruptcy. As I predicted 18 months ago, Circuit City is learning the hard way that firing people for being good at what they do is a very expensive way to save money. Given their > 99% drop in stock price, I don't give them much of a chance of avoiding Chapter 7 in the not too distant future. The market is clearly saying that their recovery would be nothing short of a miracle.

I got a call (ostensibly) from pollsters/researchers at Mississippi State U. (paid for by the American Academy of Pediatrics) about second-hand smoke. As one might expect, the questions were slanted heavily to "nudge" the "pollee" towards a position of pretty much not allowing anyone to smoke anywhere but their own home--and that only if children or pregnant or nursing women are not present.

Most interesting was a repeated hint that doctors might soon have some sort of test to detect second-hand smoke. More or less, the MSU researchers (and by extension the AAP funders) are trying to tell us that a doctor ought to be performing a fairly invasive test to figure out if the parents actually know whether their kids are around tobacco, or whether the parents do and might be lying to them.

Sorry, AAP; if I want to figure out whether my kids are around smokers or smoking, I have a high tech device called a "nose," and quite frankly, I'll handle this one. I don't need Mary Poppins with a six figure paycheck to work behind my back.

In a response to a comment on his site, Tim Bayly urges readers to forget about the big dogs. I think he's got a great point, as one of the biggest tragedies I've seen in life in Christ is the love of being "big" in church.

Why so? For starters, when one pastor preaches before thousands, how does he got to know them intimately and help them grow in Christ? Even if he rightly gets other elders to help, hasn't he just deprived them of the opportunity to learn by both counseling (which they get to do) and teaching (which they largely don't)?

It can get worse. Some pastors of huge churches don't delegate, and hence counseling never happens--again, the pastor can't know 10,000 people well. Worse yet, the pastor gets the idea that he is a big deal, and spends his time being a celebrity, not a servant of the Word. And finally, if we find ourselves again in "Rome" under "Nero," it's a lot easier to shut down a few big churches with popular pastors than it is to shut down hundreds of thousands of smaller, more intimate churches.

So I plead; let the big dogs lie. God has chosen the foolish things of the world to shame the wise, the humble things of the world to shame the rich. We should take note, and abstain from being impressed by the wealth, glamor, and fame that the world worships. Instead, let us celebrate sweet fellowship in the Word like our Lord intended.

...have you ever noticed that the art of Thomas Kinkade bears a striking resemblance in certain ways to the Smurfs' village? Luckily for Kinkade, Pierre Culiford is no longer with us and cannot sue. Watch out for his heirs, though!

Of course, those who truly love art always cheered for Gargamel. They still do, if you catch my drift.

Thursday, November 06, 2008

Evidently, his campaign workers aren't getting paid what they were promised. (h/t Cathy) Wouldn't it be funny if because of this and Obama's pledge to eliminate secret ballots for unionization elections, Democratic campaign workers unionized and went on strike in 2010 or 2012?

Part of me is enthusiastic about the prospect of Obama breaking his promises made in the campaign--that would generally mean his politics moving towards mine. On the other hand, if he breaks his campaign promises, he's also likely to break the promises he'll make next January. That's not such good news, nor is it good to cheer at any rate at the (further?) descent of a man into gross violations of Exodus 20:16.

Pay up, Barack, and fire the people who reneged on their promises. You cannot afford their "help."

It is an interesting fact to me that so many liberals can live in places with high rates of welfare dependence, but not clue in to the fact that all that welfare spending isn't lifting those areas out of poverty. How is it that Barack and Michelle Obama spent a lot of time in some of the poorest neighborhoods in Chicago (as community agitator and U. of C. worker--the U. is not in a good area at all) without figuring out that the "Great Society" wasn't helping?

I would suggest it might have something to do with Rev. Wright failing to adequately exegete Exodus 20:15, and for that matter, the fact that he won suggests that too many pastors (and parents) have failed to take God's Word into account on this matter.

Just because one can legally vote in a subsidy doesn't mean it's a moral thing to do, and if you fail to figure out that stealing via government is still stealing, you're also pretty likely to fail to figure out that the biggest problem your area faces is a failure to grasp the truth of Exodus 20:15 and Ephesians 4:28.

Wednesday, November 05, 2008

....that the day after Barack Obama and Joe Biden won, the DJIA dropped almost 500 points. Now certainly that news isn't as big as it once would have been, but I have to wonder if the stock markets are taking this into account.

Also along those lines, I follow four stocks each day, three that sell mostly to the private sector, and one that sells mostly to the government. One of those stocks rose today. Guess which one it was.

Tuesday, November 04, 2008

Evidently (h/t bunches of people, BTW) Chuck Schumer has figured that regulating political speech is about the same as preventing pornography. Apart from the obvious absurdity of that comment, he adds (digs) further by claiming that everyone would want the media to be "fair and balanced", as decided by a government bureaucrat. Let's test that theory.

Assume I have a talk radio show where I consistently argue that the "fairness bureaucrats" ought to be fired for participating in a blatantly unconstitutional activity. Am I to assume that the "fairness bureaucrats" will agree when I tell them that it's fine if up to 50% of media reports say they should be fired? Or is it more likely that they'll decide my speech is "unfair" and threaten to take my radio stations' licenses if they don't fire me?

The answer should be obvious; the Fairness doctrine isn't about "fairness," but rather about removing opinions unfavorable to those in power. Hopefully it remains as dead as it is today, or even more so.

If people believe that getting to the corner office is primarily a matter of hard work and skill, and not of emptying the beer bong ten times at the frat party, Circuit City seems to be working hard to persuade us otherwise.

Note to executives; you do not ensure the long term prosperity of a company by firing people who have worked their way up because they earn fifty cents too much each hour.

Note to boards of directors; if you want executives to look out for the long term profitabiity of a company (and you should, it's your job after all!), tie their compensation not to stock price, but to long term profitability.

Here in Minnesota, an "astroturf" (so-called environmental) group is desiring to load down our state Constitution with a measure to devote a .375% of our aggregate sales to water pollution, the arts, and so on. The Taxpayers' League gives us 10 great reasons not to vote for it.

Unfortunately, it doesn't include the biggest reason not to vote for it; the state really doesn't have authority over the biggest water polluters, and hence they can't do much to clean up our water. This is a classic case of throwing money at a problem when the actual causes are well known.

That is, the main pollution sources are known industrial sources, leaky septic systems, and farm runoff. The EPA and the USDA pretty much take ownership of farm runoff and industrial sources, and the state....simply needs to revise codes and its own regular enforcement of septic system problems to solve the issues of leaky septic systems.

Again, classic case of money being thrown at an issue without a plan. Now if you really wanted to clean the water, you could actually do it for free. How?

Repeal the state ethanol mandate for fuels, thereby reducing the demand for corn, thus reducing runoff. And actually, it wouldn't be just free--it would save state taxpayers millions in gas taxes and maintenance on their cars.